ABB to Purchase Siemens’ Low Voltage NEMA Motor Business
ABB looks to expand its lineup of motors with its acquisition of Siemens' Low Voltage NEMA Motor Business, a move that ABB hopes will benefit the two parties by bringing the Siemens' portfolio to its full potential.
ABB recently announced its plan to purchase the NEMA Motor portion of Siemens portfolio. The NEMA Motor manufacturing process is located in Guadalajara, Mexico and produces low voltage electric motors.
The acquisition promises to bring with it a long standing customer base in North America. It will also provide ABB with experienced employees to continue work under ABB’s leadership, including those in operations, sales, and management.
A look at Siemens' low voltage NEMA motor business in Guadalajara, Mexico. Featured image used courtesy of ABB
Siemens’ Low Voltage NEMA Motor Business
ABB Motion, a group of ABB, is looking to use the Siemens’ low voltage NEMA motor business acquisition as part of its profitable growth strategy. The profitable growth strategy hopes that they can use the purchase to better help customers with improved North American support. It also benefits ABB by better enhancing product offerings and will expand supply chain relationships over time.
“This bolt-on acquisition creates strong value for ABB’s NEMA motors division,” said Tarak Mehta, ABB Motion's president. “Investing in the business and opening up sales opportunities in North America and especially Mexico will allow this business to be margin accretive to the ABB Motion business within 24 months.”
The second half of the transaction has not been finalized yet, and the acquisition is expected to be complete by the second quarter of 2023. The financial details of the transaction were not disclosed, but the NEMA Motor Business brought in a revenue of approximately $63 million in 2021.
Siemens’ SIMOTICS low voltage NEMA motor. Image used courtesy of Siemens
What are NEMA Motors?
NEMA motors follows a set of standards created by the National Electrical Manufacturers Association (NEMA). The association is used to regulate a set of standards designed to help manufacturers and users with the designation of different motors. The standards are used to create known measurements and values for design classes, frame sizes, enclosures, and configurations for different NEMA motor classes.
There are four standard classes of NEMA motors that include, NEMA class A, NEMA class B, NEMA class C, and NEMA class D. Each class follows certain standards so customers have a frame of reference to use when looking at the types of NEMA motors needed for certain applications. The classes help to break the motors down into different current ratings, expected starting and running torques, maximum percentage of slip, and other specific parameters.
ABB is excited to add the low voltage NEMA motor business to their portfolio and hope to bring it to its full potential. Image used courtesy of ABB
ABB in Motion
With improvements in R&D expertise, supply chain relationships, and market access, ABB hopes to bring the low voltage NEMA motor portfolio to its full potential as an ABB owned business. In expectation of benefits created by identified synergies, local customers in Mexico expect to receive better support with local sales and manufacturing opportunities.
According to Jesse Henson, President of ABB’s NEMA motors division, ABB is happy to add the low voltage NEMA motors to their existing lineup of ABB and Baldor-Reliance industrial electric motors.
ABB also believes that the addition of the NEMA motor lineup will help to benefit both companies with larger growth than would be expected from either company operating on their own. The new acquisition looks to be a beneficial strategy for many different reasons.